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$99 iPhone Coming This Summer: RBC

According to RBC analyst, Mark Abramsky, a cheaper version of the iPhone 3G will debut this summer and be priced at $99. Instead of the, iPhone Nano, it will more than likely be a ‘lite’ version of the existing iPhone 3G which could omit the 3G altogether.

Among other things, the GPS that currently exists in the iPhone 3G may be omitted as well. It may also have a reduced camera resolution and of course much smaller memory storage. Despite the lack of features, the entry price of $99 would definitely attract more customers as that price point would appeal to more consumers.

The current $35 a month iPhone data plan may also hurt the new iPhone ‘Lite’ customers so it would be excepted that a new lower-cost plan be brought to the table at around $15 a month. The new plan would come with at trade off however, with a capped data usage per month.

Meanwhile, the iPhone 3G will get feature upgrades, such as a better camera, video capabilities. Abramsky thinks Apple could sell 20-30 million of these cheaper iPhones in fiscal 2010, boosting Apple’s smartphone market share to almost 20%. Cheaper iPhone will eat into iPhone 3G and iPod sales. And a lower subsidy and lower margins means Apple will have to sell three times as many to make the same gross profit from one iPhone 3G. Abramsky expects fiscal 2010 iPhone gross margins to shrink to 35%-37% from 50%+.

This entry was posted on Tuesday, February 10th, 2009 at 10:46 pm and is filed under iPhone News & Updates. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

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